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A dispute in the Senate over expanded unemployment benefits for lower wage workers is threatening to delay passage of the US$2 trillion coronavirus relief package as several Republicans demanded changes and independent Senator Bernie Sanders said he would hold up a vote if the legislation is altered.
Senator Lindsey Graham of South Carolina and several colleagues want to limit the unemployment insurance provisions for lower-wage workers, warning that, as written, they would damage the economy by providing millions of workers with more money in unemployment benefits than they make on the job.
In response, Sanders, a candidate for the Democratic presidential nomination, tweeted that he’d hold up the bill and insist on more strings on money for corporations unless they drop their concerns.
Graham, Ben Sasse of Nebraska, Rick Scott of Florida and Tim Scott of South Carolina said the provision, granting workers an additional US$600 per week in unemployment benefits for four months, would give employers an incentive to cut some employees and encourage laid off workers to stay out of the work force.
“This bill pays you more not to work than if you were working,” Graham said, adding it would provide the equivalent of US$24.07 an hour in his state to laid-off workers. The minimum wage in the state is US$7.25 an hour.
Senator Lindsey Graham, a Republican from South Carolina, speaks during a news conference at the U.S. Capitol in Washington, D.C., U.S., on Wednesday, March 25, 2020. The Senate moved toward a vote Wednesday on the biggest economic rescue measure in U.S. history, a more than US$2 trillion package of spending and tax breaks to bolster the hobbled U.S. economy and fund a nationwide effort to contain the coronavirus.
He said that would “destroy what’s left of the economy.”
The senators said the enhanced benefits could disrupt supply chains as well.
“If the federal government accidentally incentivizes layoffs, we risk life-threatening shortages in sectors where doctors, nurses and pharmacists are trying to care for the sick, and where growers and grocers, truckers and cooks are trying to get food to families’ tables,” Tim Scott, Graham and Sasse said in a statement.
But a spokesperson for Senate Finance Committee Chairman Chuck Grassley, an Iowa Republican and one of the primary negotiators of the provision, rejected those arguments.
“Nothing in this bill incentivizes businesses to lay off employees, in fact it’s just the opposite,” Taylor Foy said in an email to Bloomberg News. “The goal all along has been, first and foremost, to help businesses make payroll so employers don’t have to lay off employees, and to ensure that there’s a robust unemployment insurance program to help those who have lost their jobs.”
The senators said at a press conference they hoped the provision, which was going through the legislative process on Sunday, was the result of a drafting error. They asked that jobless insurance be capped at 100 per cent of a laid-off worker’s salary.
Graham said he hoped the Senate would agree to revise the measure, but that he otherwise he would want a vote on an amendment to fix the provision.
It wasn’t immediately clear if their demands would be met.
Sanders said he would hold up the legislation unless the Republicans yielded.
“Unless Republican senators drop their objections to the coronavirus legislation, I am prepared to put a hold on this bill until stronger conditions are imposed on the US$500 billion corporate welfare fund,” Sanders tweeted.
And Democratic Senator Chris Murphy of Connecticut ripped the push to shrink the benefit for lower-wage workers.
“Let’s not over-complicate this. Several Republican senators are holding up the bipartisan Coronavirus emergency bill because they think the bill is too good for laid off Americans.”
The US$600-per-week flat rate boost in jobless benefits was a compromise reached by Senate Republican and Democratic negotiators, as well as the Trump administration.
Some of the people involved in the talks had worried that capping the temporarily increased unemployment benefits to workers’ previous earnings would be too technically difficult and significantly delay money for individuals at the height of the virus-driven economic shock.
Foy pointed out that no one who voluntarily leaves an available job is eligible for unemployment insurance, and confirmed that the US$600 temporary increase was a compromise due to the differences in state-by-state implementation of unemployment benefits.
The across-the-board increase was intended to “deliver needed aid in a timely manner rather than burning time to create a different administrative regime for each state,” Foy said.